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GameStop has unveiled a unique compensation plan for its CEO, Ryan Cohen, which ties his rewards to the achievement of challenging performance targets. This move underscores the company’s commitment to aligning executive incentives with shareholder interests.
According to a regulatory filing made public on Wednesday, Cohen’s compensation hinges on significant benchmarks. For the full benefits of his package to vest, he must steer GameStop’s market capitalization to an impressive $100 billion and achieve $10 billion in cumulative EBITDA—earnings before interest, taxes, depreciation, and amortization.
In a bold move, GameStop has decided that Cohen will not receive any guaranteed pay, setting him apart from typical executive compensation packages. This means no salary, no automatic cash bonuses, and no stock options that vest merely over time.
The company emphasized that Cohen’s entire compensation is “at-risk,” contingent on reaching substantial market and operational milestones. This strategic approach is designed to ensure Cohen’s objectives are closely aligned with the long-term value creation for GameStop’s shareholders.
Interestingly, this compensation strategy mirrors a similar package approved for Tesla CEO Elon Musk. Under Musk’s plan, he stands to gain Tesla stock valued at $1 trillion, contingent upon meeting specified performance targets over the next decade. This trend suggests a broader shift in how companies are structuring executive pay to drive growth and shareholder value.
Cohen’s compensation package with GameStop includes stock options to buy more than 171.5 million common shares for $20.66 each. Shareholders must approve the new pay package at a special meeting in March or April.
Shares of GameStop rose more than 4% to $21.60 before the market open, giving the company a market cap of roughly $9.26 billion.
The company’s shares are down substantially from May 2024 when influential investor Keith Gill, popularly known as “Roaring Kitty,” appeared online for the first time in three years to declare his support for GameStop.
Gill helped ignite a “meme” stock craze in early 2021, when GameStop’s stock price soared above $120.
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